Last updated October 20, 2024
The federal government has proposed imposing a 5 percent excise tax on telecommunications services, gaming and gambling activities as part of a new bill to overhaul Nigeria’s tax system.
The bill is titled “A bill to repeal certain taxation laws, consolidate the legal framework for taxation and enact a Nigerian tax law providing for the taxation of income, transactions, goods and related matters” and is dated. are. Retrieved October 4, 2024, from Congress.
Analysis of the proposed bill
It has been revealed that it aims to introduce an excise tax on services provided in Nigeria such as telecommunications, gaming, gambling, lotteries and betting.
A section of the bill states: “The amount of a transaction subject to excise tax is the amount of money or money equivalent that a service provider can charge for services.”
“Services provided in Nigeria, including telecommunications, gaming, gambling, betting and lotteries, shall be subject to excise duty in the manner prescribed by the service and at the rates prescribed in the Tenth Schedule to this Act. ”
According to a breakdown of the bill’s excise tax structure, a 5% customs duty will be levied on telecommunications services, including postpaid and prepaid services, regulated by the Nigerian Communications Commission.
The same rate applies to gaming, gambling, betting and lottery services.
The bill also introduces guidelines on currency transactions and specifies that the difference between the Central Bank of Nigeria’s prevailing exchange rate and the actual transaction rate is subject to excise tax.
The new tax system is part of the government’s strategy to increase non-oil revenues amid fiscal pressures.
With the rapid growth of the telecommunications and gambling sectors, authorities are looking to expand their revenue base.
The bill also aims to ensure that foreign currency exchange is in line with the official CBN rate, with excess amounts to be paid as excise tax on a self-assessment model.
Punch/Hauwa Abu
